What do you all think of her budgeting style? Basically envelope style in a way (she uses actual real jars for people in 5-6 main categories after taking them through a budget calculator with recommended percentages of income for housing, transport, debt, saving and Life/everything else expenses..if percentages are drastically different, you can cut in other areas or increase income, for example if you live in a high cost housing area and it's more than 35%....ours is about 40%) We have basically have tried/done the same thing, combined with using a BudgetMap check ledger http://www.budgetmap.com. I do things a bit differently than her, for example in the transport category I keep cash for gas in an envelope, but transfer money for minor maitenance/oil changes into a column in savings that I have in my BudgetMap ledger. Really big disasters like a sudden 1000.00 of work would be emerg fund right now. Same thing with some of the life expenses such as clothes....into a column, as we tend to clothes shop only at season changes here.
Some things to note in her categories that I gleaned from the site...home maitenance in the housing category is recommended if you can as 3-5% per month of the VALUE of your home from a tax assessment (not mortgage necessarily) for appliance replacement, paint, etc. Of course if you rent, it would be different. For me, I like having that category, as I found not having it was eating up my extra $$ or sometimes it went on groceries, like light bulbs. She says to try to aim for minimum 15% of your income for debt repay, preferably more though, in order to pay off your debt in 3 years, to avoid "debt fatigue". Personally, we have chosen 5 years, which we feel is more manageable for us and we can increase our income by taking some extra work but still have a balance with our strong desire to still homeschool. I built my budget with this 5 years in mind using the absolute minimum I know I would make in my part time job and no extra income, with any extra shifts for me or hubby going to the debt. So, depending on interest rates (our only non mortgage debt is a line of credit, we actually have 2 old vehicles and visa and school expenses on it) it may be a bit less than 5 years.
One thing she does differ on from Dave Ramsey is she advocates putting at least something to retirement and emergency fund while still trying to pay debt. Her take is it is an overall way of avoiding going back into cc debt for emergencies. The saving category is the RRSP's, and emerg fund is a separate saving. I have chosen 10% overall, and split it between emerg fund and RRSP. BTW, the RRSP (registered retirement savings plan) she speaks of is like the US's 401k, except here in Canada we tend to have piddly little employer Canada Savings Bonds programs, not RRSP matches like your 401k matches. The emergency fund is the 3-6 mo worth of income thing, although we have used ours for a major appliance breakdown once to avoid a cc transaction. I do have somewhat more than the 1000.00 that Dave advocates, maybe about 1 1/2 mo of our expenses saved, and that is actually including "frivolus" categories too. Goal is 3 mo at least. I cannot get over the nagging fear that we are living too much on the edge by not making these contributions.
I dunno, I feel excited about this budget. As much as I want to go "gazelle" at my debt, I think I have other things to look at here in my life. We have an old house that is a disaster waiting to happen (and of course we would lose money if we sold, so we are stuck here). Dh has a chronic autoimmune type illness currently in remission, but it has DRASTICALLY affected his ability to work in the past. I have had injuries this past year and been unable to work as well. We are basically entering our 40's, we have a pretty good start on retirement so far compared to some, but I want to take the advantage of the magic of compounding and keep contributing, at our ages I am uncomfortable with delaying contributions, even the 50.00 per month I was managing before I got totally overwhelmed with debt would help. It's not like I am in my early-mid 20's and delaying contributing and have that wiggle room, ya know?
Here are the links to a budgeting basics article from her site, as well as the link to her interactive budget that calculates for you---link to the budget worksheet is in the article.
If you click on the pic of the house at the top right hand corner you can go to the rest of her website, as well as Q and A's, and her blog and link to the show.
I would love to know everyone's thoughts. I am excited about it as it gives me a plan but at the same time deals a bit with my "what if" fears like if dh cannot work again for a while, and that makes me feel better too.